The New Statesman published an interview with Business Secretary Vince Cable yesterday, in which he talks about the current economic situation, the banks’ reluctance to lend, his political influences and his working relationship with Tory ministers.
Here’s an excerpt:
“If you’re trying to design a system from scratch,” he says, “what you probably want is a Danish-type model, which relates tax to property values. Council tax doesn’t work anymore [in Britain]. The link is broken. There are all kinds of technical problems about valuations; how you concentrate it at the top end with the bottom end. Those are the things we should be looking at. People are more mobile than property, although one has to be careful about rich people saying, ‘I’ll live somewhere else.’ They would say that, they always say that.”
Last spring, he was still just about the nation’s favourite Vince, a self-styled free radical and ubiquitous pontificant and sage. All the same, he urged his fellow MPs to follow him into coalition with the Tories because, as he once told me, he was “an enthusiastic deficit hawk”. Now, all these months later, he talks of how “embattled” Lib Dems feel, of the mistakes made in government, but also of the successes and personal satisfactions.
The debate over the rise in tuition fees was, he says, a “failure of presentation”. What the coalition has introduced is a “progressive graduate tax in all but name”, even if that is misunderstood. He repeats: “We have got a progressive graduate tax: it isn’t about fees, and there’s no fixed debt, because you don’t have to pay it . . .” Unless, I interject, you earn a fixed amount after graduation, and then you pay retrospectively. “But if you don’t, you don’t pay it.”
It was a “bad mistake”, he says, for the party leadership, before the election, to have signed the National Union of Students pledge not to raise tuition fees. “We all take responsibility for being involved in that. I wasn’t very keen on that [at the time]. But it’s collective responsibility” – he pauses, sips his tea – “we all did it.
“We had a meeting of our key people yesterday. One of my colleagues, who you would think of as quite critical of radical policy, said: ‘We should get eight or nine out of ten for our policy, but one or two for our politics.’ I think that’s a fair assessment of how things are.”
Read the full interview at the New Statesman.
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9 Comments
The interview is well worth reading.
I blogged about the economic bits of it earlier:
http://alexsarchives.wordpress.com/2011/05/27/dr-cable-the-cassandra-within-cabinet/
Oh dear God. Is he a complete masochist? Can someone tell him that local government tax reform is hidden away in a box marked: ‘Highly explosive device. DO NOT TOUCH!’
(one out of ten for politics indeed…)
@edmaxfield
Really? Poll tax was highly explosive, and rightly so, but I’m not really sure that what he proposes here would be.
This is a thoughtful and impressive interview.
Good to read him frankly admitting how badly he got the politics of tuition fees wrong, both for signing that pledge, and the failure to present tuition fees as a form of graduate tax. I thought he messed up badly there. It’s good that he knows it and will learn from the experience.
His frankness about the serious problems facing the country is not just true, but good politics.
@Alex Marsh. Good post. I’ve answered in more detail in a reply on your blog.
If the banks end up needing another bailout then we should NOT bail them out. We should only guarantee deposits up to a certain amount – like the FDIC in the US. Mainly because of their greed and irresponsibility average people are having to suffer cuts when they were not the one who screwed the economy. And now, after the taxpayer has bailed them out, they still refuse to lend money like they should and pay themselves millions of pounds in taxpayer money in bonuses. They should have had no bonuses until they’ve repaid their debts to the taxpayer.
Because of the banks ineptitude and because of New Labour’s stupidity, we are asking the most vulnerable in society to shoulder the burden and deal with lowering living standards. Why, for example, should a sick or disabled person who has very little already be asked to suffer more because of the stupidity and greed of the elite? We must NOT bail them out again. Let them fail.
I do hope Vince reads this site, but he’s probably too busy.
Thanks George
@Ed Maxfield “Can someone tell him that local government tax reform is hidden away in a box marked: ‘Highly explosive device. DO NOT TOUCH!’ ”
It’s a funny view of government that says that they shouldn’t touch certain important matters because they might be explosive. Not one that was followed by Campbell-Bannerman, Asquith or the Lloyd George; nor, for that matter, by early Macdonald, Attlee, Heath or Thatcher.
A lot of our problems do stem from the funny financial structures of local authorities. These come from the failed experiment of the poll tax, which had one good feature – nearly everyone paid – and one bad – it wasn’t progressive. The fudge that followed involved transferring most of the fundraising to central government away from local at about the time that much implementation was going the other way and kept some of the bad point – too range of tax. This left local authorities with “Responsibility without Power”, as central government saw its fiscal muscle as a licence to micromanage local matters and to wastefully duplicate many local functions. The most blatant in today’s news was Ed Balls’ sacking of Sharion Shoesmith. Whatever the rights and wrongs of the issues this was an example of “sentence first, verdict afterwards” and ministerial arrogance.
The coalition has made some of the right noises about reducing the stranglehold of Whitehall control, but little action yet. It does depend on changes in finance.
Sorry. In my last post:
“kept some of the bad point – too range of tax.”
Should be:
“kept some of the bad point – too small a range of taxes.”
I don’t think Vince personally “messed up” over the presentation of the fees policy. I think it’s fairly clear that all concerned KNEW the new system amounted to a Graduate Tax but he was prevented from calling it that to avoid giving our party the kudos of having scrapped fees.